Why young dentists can’t afford to wait
For many young dentists, the financial pressure doesn’t ease in the initial years after graduation. With high student debt, rising housing costs, and the challenge of establishing a career in a changing NHS landscape, it’s no surprise that retirement planning often falls to the bottom of the priority list.
But doing so could come at a cost.
Generation Z are typically defined as those born between the mid-1990s and early 2010s, and they are now facing a growing pension gap. For newly qualified dentists, who often fall squarely into this group, the cost of delay for retirement saving is increasingly concerning.
The weight of debt and delayed contributions
Dentists typically graduate with one of the highest student debt levels of any profession in the UK, with student loans of £100,000 or more no longer uncommon amongst those who have to self-fund their studies. And with dental foundation training offering modest earnings in the first year after graduation, the financial breathing room to start saving for the future is minimal.
This means many young dentists could delay making pension contributions or assume they can catch up later. To a degree this will be the case as the earning potential is very favourable in the profession. However, time is a critical factor in pension planning and starting early can make all the difference
The longer you wait to start, the more you’ll need to contribute later to achieve the same result. For example, a dentist who begins saving £200 a month at age 25 could build a similar private pension pot to someone who starts at 35, but the latter might need to contribute nearly double to catch up.
A complex pensions landscape
Even for those who want to plan ahead, the pension options available to dentists can be difficult to navigate. For associates working in the NHS, the NHS Pension Scheme offers generous benefits but understanding how to join, what section you’re in, and how your income translates into pension accrual isn’t always straightforward.
Some mistakenly believe that simply working in an NHS role means they’re automatically enrolled, but this isn’t always the case, particularly for self-employed associates. Others move between NHS and private work and lose track of their pension status altogether.
If dentists don’t actively check their enrolment or seek financial advice, it’s easy to miss out on valuable tax-efficient contributions and benefits.
The lure of short-term goals
It’s also important to acknowledge that retirement may feel a lifetime away for younger professionals, particularly when more immediate goals, such as buying a home, building a private patient base, or paying for equipment and further training, are already stretching finances.
In a cost-of-living crisis, the idea of locking money away for decades can feel counterintuitive. But this is precisely why financial education and support are so important early on. Even small pension contributions made consistently in the first few years of a career can grow significantly thanks to compounding over time.
Compound interest in terms of private pensions means your pension grows not just from what you put in, but also from the interest earned on previous growth, helping your savings accelerate over time. Simply put; it costs you less to reach the same goal.
Please note: The value of a private pension pot can go up and down and its value, when you take benefits, might be less than you paid in.
What can young dentists do?
There are practical steps dentists in their 20s and 30s can take now to close the pension gap and protect their future income:
- Understand your pension scheme: Whether you’re in the NHS Pension Scheme or using a private pension, make sure you know how it works, what you’re paying in, and what benefits you’re entitled to.
- Get professional guidance: A dental Specialist Financial Adviser can help you assess whether you’re on track for retirement and make adjustments to suit your goals, career path and earnings.
- Start small, but start soon: Even if you can only afford modest contributions now, getting into the habit of saving early will pay off in the long run.
- Don’t overlook protection: If you’re self-employed or running your own practice, it’s important to consider how you’d maintain pension contributions if illness or injury prevented you from working.
Planning beyond the chair
Your dental career is about more than today’s patient list, it’s about building a life and legacy you can enjoy beyond practice. When it comes to your pension, the earlier you act, the easier it is to shape the future you want.
Want to start getting to grips with pension saving? You can have a conversation with a dental Specialist Financial Adviser at Wesleyan Financial Services by visiting Wesleyan.co.uk/dentists or calling 0808 149 9416.
Please note: Charges may apply. You will not be charged until you have agreed to the services you require and the associated costs. Learn more at www.wesleyan.co.uk/charges.
